Moody’s shocks Cowing

John Cowing, Chairperson of The South African Institute of Auctioneers (SAIA), expressed disappointment at the sweeping downgrade announcements made by Moody’s, commenting that the ultimate victims of the evitable delay in an economic turnaround in South Africa would be Joe Public.

SAIA is the most broadly represented auctioneering oversight body in the country, and Institute accreditation is a requirement for corporates, state-owned entities and financial institutions to conduct business with auction houses – trade that amounts to between R25bn and R30bn per year.

Says Cowing: “The inevitable fiscal tightening that will result from the big five commercial banks being downgraded along with the IDC, the DBSA and the Land Bank will stifle established commercial growth as well as severely hamper new business development at a time when the country is almost entirely dependent on the private sector for economic expansion and job creation.”

But according to SAIA’s Public Relations Director Joff van Reenen, the small silver lining is the growing role auctions will fulfil in the current economic climate to create a level playing field that will to some extent influence consumer price inflation.

“Auctions are globally considered to be the most transparent sales process that exists. They by their very nature of constant market correction dictated entirely by what consumers believe is reasonable value, mean that both buyers and sellers benefit from this price stability. In the medium term auctions will increasingly become the balance, and in light of the depressing national economic outlook, without us consumers would inevitably bear the brunt of excessive commodity pricing.”